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July 13, 2017

Salty Snacks’ Steady Influence

July 7, 2017By Jeffrey Steele

Anyone worth their salt knows that chips and other crunchy, sodium-laden snacks are a big reason Americans love convenience stores. A quick visit to a c-store and consumers can load up on old-fashioned potato chips, newfangled veggie chips, pretzels, popcorn and other savory products that can be perfectly paired with an ice cold drink or a ready-made sandwich.

Not surprisingly, the salty snacks category continues to excel. From 2011 to 2016, category sales grew 30%, reaching an estimated total of $11.2 billion, reported Mintel Group’s “Executive Summary of Salty Snacks in the U.S.,” released this past April.

Sales are expected to continue increasing, to a level of about $13.6 billion by 2021, Mintel said. Propelling the overall sales growth in the salty snack category, is strong expansion of meat snacks and popcorn, followed by cheese snacks and corn snacks. Failing to carry their weight on the growth front are pretzels and pork rinds, Mintel found.

NEW FOR OLD

From his vantage point, Jeff Lenard, vice president of strategic industry initiatives with the National Association of Convenience Stores (NACS), believes both old and new products and brands contribute to the ongoing robustness of the chips and salty snack category—still led by potato chips.

“There’s been significant growth in tortilla chips over the years with the considerable expansion of the Hispanic market. Within the chip category, we’re seeing that chips are not necessarily made from potatoes. Whether it’s carrots or onions, or other types of vegetables, these other chips may have a healthier halo, or at least a perception of a healthy halo,” said Lenard. “We’re also seeing other things on the outskirts, like sweet potatoes and kale. Another is Sriracha with coconut chips. The chip has gone way beyond the traditional potato or corn chip.”

In the meantime, not only are chip ingredients being refined, but also chip brands.

“We’re seeing more of a private-label presence,” Lenard said. “The 7-Eleven chain has a very extensive private label in chips, as do some other retailers. That allows a chain to focus a little more on the value customer if that’s a part of the customer base. You have a little more latitude to tell a brand story. That’s because starting a private-label brand allows you to tell a whole new brand story, and avoid what might be misconceptions around a well-known brand.”

BEYOND CHIPS

Beyond the chips aisle, industry observers are seeing growth in better-for-you items, Lenard said. A growing body of health literature indicates that consumption of nuts and seeds is fundamental to good health and longevity, with some experts reporting these are the very food items all Americans should be consuming more regularly. These reports may in part be helping nuts and seeds do “quite well” in c-stores.

Often c-store patrons entering a location have a craving for sweet or savory items.

“It’s based on wanting a flavor profile,” Lenard said.”You may want something more indulgent on some days and healthier on other days. You don’t want to put the better-for-you item exclusively in one area. They can go in a salty snack section, but there should be a possibility of multiple placements in both salty and healthy sections of the store.”Sales of other salty snack items may also benefit from a health halo. For example, trail mix doesn’t fit perfectly into the nuts and seeds line, but the idea of offering nuts and seeds with chocolate and raisins “is worth exploring,” said Lenard. “(C-stores) are doing very well with trail mix.”

Chips and salty snacks have an important place in the evolution of c-stores, Lenard said.

“As stores grow their prepared foods, it makes sense to tie in as many of their salty snacks as possible,” said Lenard. “If they’re offering a meal deal, it could involve a prepared side, or it could involve a salty snack side. And think about all the salty snacks that might be included. It’s not just chips, but seeds, nuts and other salty snacks.”

MAD FOR SALTY SNACKS

At Mad Max Convenience Stores, a Saukville, Wis.-based chain, the Frito-Lay product line dominates in chips, with Snyder’s of Hanover, Pringles, Uncle Ray’s and other brands following the leader. “Combos [Baked Snacks], nuts and meat products do well on the salty side,” said Steve Magestro, president of Mad Max.

As for newer, healthier products, they haven’t proven top sellers—yet.

“We really have not seen anything different in this area,” Magestro said. “Doritos are a strong line. When new flavors come out, even in a limited run, they seem to do well. Sweet potato chips taste great, but they just do not do well in our locations. People like the tried-and-true brands in our stores.”

Mad Max takes the same approach in merchandising chips and salty snacks at all its locations. Chip lines are invariably merchandised across from the cooler doors, on endcaps and under the counter racks near checkout for the grab-and-go crowd, Magestro said.

“We have found over the years the best location for the chip lines is always across from the cooler doors,” he said. “Salty snacks are on the opposite side of that.”

The secret of successful sales of chips and salty snacks is “promo, promo, promo,” Magestro said. Mad Max stores have two-for-one deals “all the time” to compete with big box retailers located in the same towns.